How to save taxes on unpaid rent: what you need to know

According to the current Income Tax Code "Incomes from the rental of immovable property, which have not been collected by the beneficiary, are not included in his total income, if by the deadline for submitting the annual income tax return, a rent order has been issued against him payment or an order to render the use of wages or a court decision to dismiss or award rents or an action for dismissal or awarding rents has been brought against the tenant. The incomes in question are taxed in the year and according to the amount that was demonstrably received, in derogation of the provisions of article 8 (relating to the time of acquisition of the incomes). The uncollected income is declared in a special code of uncollected income from real estate rental of the income tax return (column 16 of the E2 form)."

Column 16 of the E2 form is completed with the amounts of uncollected income from the rental of real estate, as long as the above are met and have been submitted to the D.O.Y. clear photocopies of these before submitting the statement. Especially in the case that the lessee is bankrupt, it is sufficient to present a copy of the debt declaration table in which the claim of the lessor/sublessor appears. Also, with a circular of A.A.D.E. the following were clarified, among others:

a) That uncollected income from the rental of real estate by natural persons cannot be declared, when this income comes from compensation for the use of real estate.

b) That the period of time for which rents are due should be obtained from all the prescribed supporting documents that are presented to the D.O.Y.

c) That extraordinary and in order to declare uncollected income for the period of time that elapses from the issuance of the dismissal decision or the order to return the use of rent until its execution, which took place by the end of the deadline for submitting the income tax return, it is sufficient to submission of a responsible statement and a report of expulsion and settlement drawn up by the bailiff, that for the above period the rents have not been collected. The above also applies to the uncollected compensation for non-contractual use of the property. The necessary supporting documents are submitted to the competent D.O.Y. where they are checked and registered before the declaration is submitted.